Category: Edward I. Sumber

A recent Legal Update for the Members of our Association reported a case decided by the Department of State in 2010 in which a real estate licensee, Marie A. Manfredi, had her license revoked for having engaged in the unauthorized practice of law in violation of Judiciary Law §478 (Department of State Division of Licensing Services v. Manfredi et al, 126 DOS 10). This case reiterated the longstanding position taken by the Department of State that only under specified conditions, can a non-lawyer, even a real estate licensee, prepare any legal document, without violating the law.
Continue reading “Can a Real Estate Licensee Prepare Leases?”

This column has previously addressed the inability of a lawyer to receive brokerage compensation in any transaction in which the lawyer is also functioning as counsel to any of the parties. On April 1, 2009 New York’s Code of Professional Responsibility for attorneys was replaced by the New York Rules of Professional Conduct which are patterned after the American Bar Association’s Model Code of Ethics. The new Rules provide methods by which an attorney can obtain the informed consent of the parties and thereby resolve conflicts of interest. Many attorneys thought that the new Rules would permit an attorney to act as both broker and lawyer in a real estate transaction. The New York State Bar Association’s Committee on Professional Ethics recently issued Opinion 845 which reaffirmed the prior Rule, that an attorney may not, even with the consent of all parties, receive compensation as both the lawyer and the broker in the same transaction.
Continue reading “Lawyers and Real Estate Commissions”

Mortgage rates, which rose precipitously during December, have fallen during January and while still above the record low during the week of November 11, 2010, thirty year rates and fifteen year rates continue to be remarkably favorable. Despite low interest rates and home prices which have fallen dramatically in the past four years, home buying activity has fallen substantially when compared to early 2010 when the FirstTime Homebuyer Tax Credit remained in effect. Since the expiration of this stimulant, real estate activity has fallen markedly.
Continue reading “The Mortgage Crisis: It’s Complicated!”

When Governor David Paterson signed into law (August 30, 2010) amendments to Real Property Law §443 which take effect on January 1, 2011 (“§443” or the “Law”), he ensured that condominiums and cooperative apartment units previously exempt from Agency Relationship Disclosure would now be included under this important section of the Law.
Continue reading “Written Agency Disclosure Required for Condominiums and Cooperative Apartments as of January 1, 2011”

On June 25, 2010 an opinion from General Counsel, Helen R. Kanovsky, of the Department of Housing and Urban Development (“HUD”), appeared in the Federal Register (24 CFR Part 3500 [Docket No. FR-5425-1A-01]). This interpretive rule from HUD essentially states that compensation paid to a real estate broker in connection with the broker’s recommendation of a home warranty company (an “HWC”) for a buyer or a seller, constitutes an illegal kickback in violation of Section 8 of the Real Estate Settlement Procedures Act (“RESPA”) and HUD’s regulations.
Continue reading “Compensation to Realtors® for Home Warranty Contracts are Kickbacks”

Over the past 25 years, the real estate brokerage industry has changed dramatically. The use of the computer, the presence of the internet, the shift to buyer brokerage as well as seller brokerage and the consolidation of small firms into large firms which dominate our marketplace, could hardly be envisioned.
Continue reading ““Let the Broker Beware” (Supervision of Independent Contractors)”

On April 22, 2010, new regulations adopted by the Environmental Protection Agency (“EPA”) became effective. These EPA regulations address the handling of lead-based paint during renovations in target housing. “Target Housing” means any residence built prior to 1978 and “child-occupied facilities”. For Realtors, ensuring that recommended contractors are properly certified when renovations or repairs are made to pre-1978 private housing and general familiarity with the law and regulations are essential.
Continue reading “The Realtor’s Role – 2010 Lead-Based Paint Regulations”

Early in 2009 Amanda Hansen, a 16 year old living in West Seneca, New York, spent the night at her friend’s home. She slept in a bedroom which was in the basement. When she could not be roused the following morning she was taken to South Buffalo Mercy Hospital where she later passed away having been exposed to lethal levels of carbon monoxide.
Continue reading “Amanda’s Law”

On December 15, 2009, an informal response was given by the New York State Bar Association’s Committee on Professional Ethics (Inquiry No. 43-09) in which the State Bar Association clarified circumstances in which a lawyer may ethically participate in a residential real estate transaction, when the Seller has agreed to increase the sales price “in an amount equivalent to the amount of the Seller’s concession”. This excellent response by Committee Chair, Roy D. Simon, will be helpful to many lawyers who have avoided any transaction involving a gross up of a contract price with an equivalent Seller concession.
Continue reading “Seller Concessions – New York State Bar Association Clarifies Ethics Opinion”

Real Property Law Section 440-a. provides that a person cannot obtain a license as a real estate salesperson or broker if that person was convicted of a felony and has not subsequently received an executive pardon, a Certificate of Relief from Disabilities or a Certificate of Good Conduct. What, then, are the realistic possibilities that an individual once convicted of a felony can regain a license to act as a salesperson or licensed real estate broker?

Nature of the Conviction

Section 440-a. of the Real Property Law does not differentiate between types of felony convictions. Section 440-a. states in relevant part:

“No person shall be entitled to a license as a real estate broker or a real estate salesman under this article who has been convicted in this state or elsewhere of a felony, and who has not subsequent to such conviction received executive pardon therefor or a certificate of good conduct from the parole board, to remove the disability under this section because of such conviction.”

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